The main legal point established in the judgment is that employees are entitled to continuity of service and the rights and privileges acquired by them by reason of past services even after a transfer of business, provided there is continuity of service and identity of business.

1. This petition raises an important question of law relating to industrial relations. The petitioners before us were employed in the Nishat Talkies, Poona. These Talkies were started about 15 years ago and were originally owned by one Mr. Kakde. Kakde sold it to one Mr. Bhole. Mr. Bhole could not pay the whole of the purchase price and he therefore mortgaged it to Kakde. Upon this mortgage Kakde obtained a decree for the sale of the mortgaged property. There was also a mortgage held by the Bank of Maharashtra on the same property and the Bank obtained a decree against both Kakde and Bhole. The property was sold in execution of the decree and Kakde purchased the property at the auction. The Bank filed an execution application against the judgment-debtors and got one Shri Gowaikar appointed a Receiver. The Receiver took possession on the 22nd of February, 1954. On the 11th of October, 1954 one Sapal M. Tata entered into an agreement with the Receiver for the supply of films for exhibition in this theatre. On the 27th January, 1956 the Receiver was discharged and on that very day he served notices of discharge on the employees of Nishat Talkies. On the 28th January, 1956 Kakde gave a lease to Tata for ten years beginning from the 1st of February, 1956. On the 31st of January, 1956 Tata issued letters of appointment to the employees of the Nishat Talkies. The employees were paid by the Receiver all their past dues and passed receipts in respect thereof. Thereafter on the 7th of May, 1956, 13 disputes raised by the employees were referred for adjudication by the Government of Bombay to the Industrial Tribunal. The reference was against the Nishat Talkies and the Court Receiver; but as the Receiver had ceased to have any Interest in the Nishat Talkies by reason of his discharge, the reference continued against the Nishat Talkies only. Kakde, as the owner of the Nishat Talkies, was made a party to the reference and appeared before the Industrial Tribunal and stated that as from the 1st of February, 1956 S. M. Tata was conducting the business and all the dues prior to that date had been paid to the employees. Tata was served with a notice by the Industrial Tribunal but did not appear in the proceedings. Presumably, he was content to let Mr. Kakde safeguard his interest in these proceedings for, if at the date when this dispute came up for determination before the Industrial Tribunal Tata was carrying on business of Nishat Talkies, and the party to the reference was Nishat Talkies, obviously the real party was Tata and not Kakde, for any individual carrying on business in a business name may be sued in that name; but obviously Kakde was left to dispute the claim of the employees in this particular industrial dispute.

2. Now, one of the disputes, viz. dispute No. 12, was "Continuity of service: The Past services of every employee should be considered as continuous for all purposes." This demand also affected other demands which were dependent upon the determination of the question of continuity of service. Regarding continuity of service the Tribunal rejected the demand. Consequently they also came to certain conclusions on other demands which were affected necessarily by the rejection of this demand. The main grievance on this petition is that in rejecting the demand for continuity of service there is an error apparent on the face of the record in the order passed by the Industal Tribunal and that they have also erred in law in not having applied to the facts of this case law which is now well established.

3. Now, before dealing with the question as to whether there is or is not an error apparent on the face of the record, it would be convenient to state what the position in Jaw is with regard to continuity of service where business changes hands from one management to another but the employees continue in the same business. Do the employees under such circumstances continue to enjoy the benefits that have accrued to them by r